Fast-casual restaurant brand made investments in catering channel in 2023, CEO Michael Osanloo says on Q4 earnings call
Portillo’s Inc. plans to flex its multichannel opportunities, especially catering, executives said this week.
The Chicago-based fast-casual brand, which reported earnings Tuesday for the fourth quarter ended Dec. 31, said it grew its catering business in the fourth quarter, said Michael Osanloo, Portillo’s CEO and president, on an earnings call.
“We excelled in dine-in. Our drive thrus were humming. Pickup and delivery orders were flying off the shelves, and we did a great job growing our catering business,” Osanloo said.
The catering growth came from investments in that part of the business, Osanloo said.
“In 2023, we invested in dedicated catering resources such as a new concierge service to provide our guests with a high-touch ordering experience,” he said. “We also strengthened our ability to handle large-scale catering events.” Portillo’s
served holiday meals to frontline workers of a major airline in both Chicago and Arizona, Osanloo added.
“The overarching theme there is that these investments are driving strong catering sales and will help us to continue to grow this channel,” he said. “Today, catering represents only about 5% of our overall revenue. We know it can be more. We're excited about the opportunities to grow this channel, by marketing additional catering occasions and expanding this channel across our new markets.”
Michelle Hook, Portillo’s chief financial officer, added, “We're going to continue to work toward is making sure that our guests understand that we have this channel outside of Chicagoland.”
Osanloo said catering is part of Portillo’s multichannel platform, but in catering the company sees “more opportunity, more tailwind. And we look at the catering performance in the core versus in our growth markets and we know that we can get better.”
Osanloo said Portillo’s plans to “aggressively” market two new higher-margin salads that is will be adding to the menu.
He said Election Years tend to increase television advertising rates.
“We're probably not advertising the back half of this year anywhere in the country,” he said. “We would get shouted out by local politicians. … If we're going to advertise, we're going to do it selectively. We're going to advertise and as necessary, and when we think we're going to get great returns on those dollars.
For the fourth quarter ended Dec. 31, Portillo’s Inc. reported net income of $9.6 million, or 13 cents a share, up from $2.7 million, or eight cents a share, in the same period a year ago. Revenues were rose to $187.9 million in the quarter vs. $150.9 million in the prior-year period.
Same-store sales increased 4.4% in the quarter, with transactions increasing 1.3% and average check increasing 3.1%. For the 2023 fiscal year, same-store sales grew 5.7%. The company ended the year with average unit volumes of $9.1 million per restaurant, Osanloo said.
In 2023, Portillo’s opened 12 restaurants including six in the fourth quarter. That 12 includes, eight planned 2023 restaurants as well as the four carryovers from the prior year.
In 2024, the company plans to open nine new restaurants, including the first in the new market of Houston.
Portillo’s, founded in 1963, has more than 80 restaurants in 10 states.
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